‼️IMPORTANT TOPIC ‼️
Order book and market depth
🔰The order book is a collection of active buy and sell orders. Each cryptocurrency exchange has a unique order book. This book separates orders into bids (buy orders / green) and asks (sell orders / red). The “bids” are the prices that traders are willing to pay, while the “asks” (also known as “offers”) are the prices at which traders are willing to sell.
🔰Each order in the book has a price and a quantity. The order book organizes open orders by price: each unique order price is assigned a row. The quantity (amount to buy or sell) of each order at that price is combined in that row. It's another variable to consider when reading Bitcoin and other cryptocurrency charts.
📢The order book provides traders with information about market supply and demand forces by listing open orders by price and indicating their combined quantities. Normally, the order book is divided into three columns: price, quantity, and total quantity.
📊What is market depth about?
🔰The market depth chart represents the order book in a different way, because the depth chart data is derived from it. Both show the same information. In our example, the market depth chart consists of the red and green horizontal bars behind the order book.
🔰When trying to find the difference between the bid-ask, buy and sell walls, or support and resistance levels, traders may prefer to use the depth chart or the order book. Both are excellent ways to read cryptocurrency charts and create an informed trading strategy.
📢It's easier said than done📢
✅️Learning to read cryptocurrency charts is easy, most of the research is already done. However, putting what you've learned into practice is much harder. No trader uses all technical indicators, nor all indicators for all financial instruments. Some prefer to use moving averages or the RSI with certain financial markets (for example, futures or options).
📢$BTC #BinanceAlphaAlert The information that can be read on a cryptocurrency chart can often be overwhelming for beginner traders. Reading Bitcoin and other cryptocurrency charts alone is not enough. You have to get your hands dirty and find the tools that best fit your trading strategy. Implement a plan, stick to it, and don't cling to your trades; it's a numbers game. No one is the perfect trader.
